What is a shelf offering?

A shelf offering is a type of public offering in which a company registers a new issue of securities with the Securities and Exchange Commission (SEC) without selling the entire issue at once. Instead, the company can sell portions of the offering over time, typically within a two-year period.

This type of offering provides flexibility to the company by allowing it to quickly raise capital when needed without having to go through the full registration process each time. It also allows the company to respond to market conditions and take advantage of favorable pricing opportunities.

Shelf offerings are commonly used by larger, more established companies who have a track record of issuing securities and may need to raise capital on a regular basis. Investors should be aware of shelf offerings, as they can dilute the value of existing shares if the company issues new shares at a lower price than the current market value.

Overall, shelf offerings provide companies with a flexible and efficient way to raise capital while also keeping costs and administrative burdens low.